speech pathology employee | Speechies in Business

Over the break, while couch-potato gazing at the cricket, I gave some thought to long-term, sustainable business models for private speech pathology practices. Specifically, mine!

When you start out, almost anything you read about launching a small business will at some point hit you with a frightening stat or two, e.g., that 80% of small businesses fail in the first 5 years. I’m not aware of any specific stats on speech pathology practices, but I’d expect that figure to be about right.

Why?

Lots of us start out in private practice because we want the flexibility and independence of running our own show. We are confident (or confident enough!) in our technical skills as speech pathologists and think we can do things better that where we were before to help clients with their communication or swallowing needs.

But knowing how to be a great speech pathologist is not the same thing as knowing how to run a business. To run a business, you need business knowledge and systems.

Business infancy

When I started my private practice, I was pretty much my clinic, and my clinic was me. My wife and I did all the work ourselves. But as we got busier, and our case load grew in volume and complexity, the work became harder to handle. At one stage, we were working seven days a week – often 12 hours a day – to ensure we kept our therapy service quality high. But, even working 60 hours a week to ensure our clients got the best possible service, “non-client” things started to slide. We just didn’t have the time or energy to attend to all the back office stuff.

Business adolescence

Eventually, we got some help. Initially, with some of the back office tasks we despised (e.g. book-keeping), and then by hiring high-quality staff to help deliver our services. The danger with this “teenager” stage of business is ensuring your quality remains high even though you are not delivering every assessment and therapy session yourself. This was (and remains) hard for a control freak like me! But I knew that my practice would fail in the long run if I couldn’t grow it to a stage beyond my ability to do and control everything myself.

Sometimes during this phase, I felt like retreating back to the comforts of the one-person practice. But then I remembered how awful it felt to be overloaded with work, turning clients in need away as my waiting list ballooned.

Planting seeds for growth at the outset

Successful businesses think about the future. Ideally – in the long run – you want your practice to work even when you’re not there. To achieve this, you need to think like a business-person and plan how your business will develop as it grows. So I looked in the mirror and asked myself:

What do you care about the most?
Why is your practice an opportunity worth pursuing? Is it aligned with what you care about the most?
How do you want to live?
How much money do you want (or need)?
How much freedom from working at the coalface do you want?
What sets your business apart?
How will you get clients?
What type of clients will you help?
How will you deliver your services?

(If interested, you can read more about our start-up philosophy here.)

I then developed a one-page business plan with my purpose front and centre, and my break-even point highlighted in pink.

Even though I didn’t want to, I needed to think like an “entrepreneur”. Now, I know that word has some colourful connotations, and not everyone in private practice is comfortable thinking of their practice as a business. But, as I’ve said before, I think it’s perfectly possible to be both ethical and profitable. In my previous career as a finance lawyer, I observed that it was often the well-meaning, but unprofitable and ill-managed, businesses that were vulnerable to major systems failures and pressures to cut corners at the expense of their clients.

Get out of your own way!

Here’s a quote I love from Michael Gerber:

“The problem isn’t your business; it never has been. The problem is you!”

That was so true with us! We needed to realise that many of our early struggles were caused by the confusion and tension of trying to wear multiple hats at the same time. Every day, in the clinic, I was part:

(mostly) speech pathologist, focusing on improving my technical skills to help clients with the latest, evidence-based therapies;
manager, focusing on boring (but essential) business and compliance systems, organisation strategies, and finding ways of doing things more efficiently; and
entrepreneur, creating new services and products, dreaming up new ways of doing things, looking for opportunities to grow and to connect with others.

The (ongoing) problem is figuring out how much energy to devote to each role at any given time.

How to build a business that lasts

Another top tip I learned from Michael Gerber:

“Pretend that the business you own…is the prototype, or will be the prototype, for 5,000 just more like it!”

Now, as an, ahem, former McDonald’s crew member, I’m not a huge fan of the franchise model for allied health. But I loved the idea of designing my clinic to be systems-dependent rather than owner-dependent. Documenting your key systems:

forces you to write down the (sometimes conflicting) contents of your head. I discovered scores of duplicated efforts, wastage and service gaps in my systems just by writing them down;
allows others to understand and work to your standards without being micromanaged;
ensures people are accountable for their outcomes; and
increases the predictability of your service quality.

When we started our clinic, we set up systems that we hoped would grow with the business – even if they seemed ridiculously over-engineered for the client flow at first. I even signed my own Code of Conduct.

Why we had an organisation chart for two people

Even when we were (literally) a Mum-and-Dad business, we wrote down all the roles in our practice (e.g. clinical, operations, marketing, Human Resources, accounting, finance, etc.), and then assigned them – initially all to ourselves, but, as the business grew, to our staff and partners. This helped us stay clear on who was accountable for what and when, even (especially) when we were doing everything.

Human Resources: hire people who are smarter than you

When we hire someone to help us, as an employee, contractor or service provider, we test candidates against the standards we’ve set for ourselves in the position. We look to hire people who are at least as good (preferably better) than us at doing the job. We also try to make sure staff and partners understand the meaning of the work they’re doing and how it fits into our purpose and plan.

Marketing: it’s all about the clients

Our marketing plan is simple: doing our job as well as we can. We don’t rely on advertising. We focus all our efforts on solving real-life problems for people who need speech pathology. That’s why we publish free blogs, books and resources, and address frequently asked questions. That’s why we do community and school talks. We try, consistently, to help people who need speech pathology services find the answers they need.

Don’t lose sight of why your business exists

The business development process – the design of business models and systems – never ends, especially in a time of great change for speech pathologists. When we look at our medium-to-long term business goals, we see a complex, but easy-to-run, set of systems and processes that all work together to support our primary aim: helping adults and children to speak for themselves.

Principal source: Michael E. Gerber, The E-Myth Revisited: Why most small businesses don’t work and what to to about it. Kindle edition via here.

Image: https://tinyurl.com/h2tx26v

I’m an optimist when it comes to the future of the speech pathology profession. But I’m also a realist.

A. Supply > demand = exploitation?

Although I remain bullish about the long-term prospects of the profession, I agree with many colleagues who think that the current supply of speech pathologists is out of whack with demand in Australia in some areas of practice. For speech pathologists seeking a job in a capital city, the risk of exploitation is real – particularly for new graduates in private practice. As a lawyer, I’ve seen it in some of the cases that come across my desk.

Speech pathology employers face a slew of legal risks in this market, too, particularly when dealing with some of the less clear-cut legal issues. Risks range from civil employee claims to criminal prosecutions, from financial strain to bankruptcy and loss of practising rights.

Some legal risks are unavoidable in business. Others are caused by a lack of knowledge about legal responsibilities or compliance systems to manage them. As with every profession, there are probably also some hirers out there engaged in what I would politely call “questionable practices”. (More on that later.)

B. Duty to be informed

In the current job market, knowing your legal rights as an employee is essential. On the employer side, you need to know this stuff if you want to protect your reputation and stay in business: ignorance of the law is no defence if a regulator comes knocking or you get sued.

So here are some employment law basics that everyone in private practice in Australia should know about. None of what follows is intended to be legal advice. But it is intended to alert you to some of the main issues you need to think about when hiring, or being hired as, an employed speech pathologist in private practice in Australia.

C. Key things you should know

1. Legislation

Australian employment arrangements are subject to the Fair Work Act 2009 (Cth).

2. Award

The modern national award for speech pathology employees in private practice is the Health Professionals and Support Services Award 2020 (MA000027). Read it. It takes 20 minutes. If you are a graduate:

you are a “Health Professional employee – level 1″ for the purposes of the Award;
if you have a Masters degree, you should be paid at least at pay point 4 (currently $1032.90 per week full-time); and
if you have a 4-year Bachelors degree, you should be paid at least at pay point 3 (currently $998.40 per week full-time).

These are the rates current as at 1 July 2020.

In addition to minimum wages, the Award covers types of employment (full time, part time, casual), ordinary hours, leave, allowances (such as travel allowance, currently $0.80 a kilometre), termination of employment, redundancy and dispute resolution.

3. Minimum employment standards

Speech pathology employment arrangements are subject to the 10 minimum National Employment Standards covering things like annual leave, long service leave and redundancy pay. Read more about these important topics via the Fair Work Ombudsman:

4. Income tax and PAYG

Employed speech pathologists earn salary and wages that are subject to income tax under the Income Tax Assessment Act of 1997 (Cth) and the Income Tax Assessment Act of 1936 (Cth). This tax is withheld from employees and “paid as you go” (PAYG) by employers on their behalf. You can read more about PAYG here.

5. Superannuation contributions

In addition to employee salaries, employers must make superannuation payments for employees under the Superannuation Guarantee (Administration) Act 1992 (Cth). Currently, these superannuation contributions are equal to 9.50% of an employee’s salary and wages. You can calculate superannuation contributions here.

6. Employment Contracts – key things to look out for and to seek advice on

Before signing up, read your draft employment contract carefully. Unfortunately, as we’ve lamented elsewhere, many of the precedent speech pathology contracts floating around are littered with serious errors. Some contain very outdated references. Some contain straight-out illegal terms.

At a minimum, make sure your contract refers to the correct Award (including pay point), the National Employment Standards and the Fair Work Act 2009 (Cth). Make sure you are being hired as a speech pathologist (seems obvious, but be wary of titles like “consultant” or “advisor”, and especially “assistant” or “support worker”).

Watch out for:

overly long probation periods – probation periods should not be longer than six months – and provisions that seek to claw back expenses or costs if an employee is terminated at or before the end of the probation period;
clauses that seek to restrict what paid work you can do for others while you are employed;
clauses that seek to restrict:
- where you can work; and/or
- what kinds or work you can do,
  if/when you leave (I’ve seen some pretty broad restraint of trade clauses out there in the market);
clauses that purport to restrict your ability to start your own practice if you leave;
minimum numbers of clients you must see every day, especially if the number is disproportionate to your experience levels to do the job ethically; and
clauses that purport to make your pay conditional, e.g. on the employer first getting paid by a client or third party.

Prospective employees should also be aware of their key duties to the employer, e.g. to co-operate, to use care and skill, to act with fidelity and good faith (e.g. not to steal business, make secret profits on the side, seek to entice other staff away, not to disclose confidential information to others, not to assert ownership rights over the employer’s intellectual property). A solid written employment contract will deal with many of these terms, but Courts sometimes imply these terms when the contract is silent (or not written down).

7. Sham contracting arrangements – pretending an employee is an “independent contractor”

This is a big topic and warrants a couple of articles on its own.

In short, hiring independent contractors is a common practice for speech pathologists. It’s usually cheaper for hirers because they don’t have to pay employee entitlements (like leave) or make superannuation contributions or pay PAYG tax instalments. It can also be more flexible for the workers who can work for different hirers and do different kinds of work.

Some of the independent contracting arrangements I see out in the market are, in reality, poorly disguised employment arrangements. It’s a grey area in some cases – the principles are clear, but the application can be tricky. But the legal risks of getting it wrong fall mostly on the hirer/employer. For example:

a disgruntled contractor may sue a business claiming he/she is an employee entitled to annual leave and other employee entitlements;
Fair Work Australia may fine a business for entering into a “sham” arrangement, i.e. alleging the ’employer’ attempted to disguise an employment relationship as an independent contracting arrangement to avoid responsibility for employee entitlements; and/or
the Australian Taxation Office (ATO) may audit and then prosecute the business (and sometimes its owners), e.g. for failing to withhold ’employee’ income and other taxes as required for employees.

If you don’t know much about this important issue, start with these resources:

Fair Work Ombudsman: Contractors and employees – what’s the difference?
Fair Work Ombudsman: Sham Contracting Arrangements
ATO: Employee/Contractor Decision Tool
ATO: Difference between Employees and Contractors
ATO: Employee or contractor – Myths and facts

If you’re still not sure, seek legal advice before signing up.

8. “Volunteers” doing speech pathology work

This another area of controversy – and one where I hold strong views. Here, I’m not talking about students on placements, which are usually classed as “Vocational Placements” for the purposes of the Fair Work Act and are thus legal.

I’m talking about speech pathology graduates and other speech pathologists being given the “opportunity” to do volunteer work for other speech pathologists, e.g. to overcome a “lack of experience” hurdle. These are sometimes very informal arrangements, with nothing in writing. Other times, they are structured as an “unpaid trial” or “unpaid internships” offering alleged perks like free training, networking opportunities and training.

Spoiler alert: I think many “volunteer arrangements” are legally questionable and should be stamped out.

The Fair Work Ombudsman makes it clear that true volunteers:

must not do “productive work” – this would, in my view, clearly capture providing speech pathology services for money and would probably apply to doing free screeners too if they are part of an initiative to generate business for a private practice hirer (which they almost always are);
should be the main beneficiaries of the arrangement; and
must receive a meaningful learning experience, training or skills development from the position.

Otherwise, there’s a good risk that the “volunteer” is, in reality, an employee and entitled to be paid accordingly. Again, the main legal/economic risks of getting this wrong is on the hirer, although the short-term damage of engaging in dodgy volunteer “hiring” of course hits the volunteers too, with collateral damage to the profession’s reputation.

In my view, short-term, purely observation/shadowing arrangements might be okay, provided the volunteer learns a lot and isn’t expected to do anything productive. But, if the “volunteer” is expected to engage in speech pathology-related professional work to benefit the hirer, the volunteer might have good grounds down the track to make a claim against the hirer for unpaid wages and entitlements (and interest) as an employee – especially if the volunteer comes away from the “opportunity” less than impressed or feeling exploited.

You can read more about unpaid work arrangements here. For members of Speech Pathology Australia, there is a Position Statement on Volunteering in Speech Pathology (behind the members’ wall), which binds members. But the Position Statement is arguably more permissive than employment laws, and remember that your legal obligations come first.

Bottom line

There’s lots of speech pathologists around, especially in big cities, and more competition between private practices than ever before. This makes it hard to land a job; and puts business pressure on private practices to hire efficiently. If we want to avoid a race to the bottom, we must uphold good hiring practices; and, to do that, we need to know our basic employment rights and responsibilities. I hope that this overview was a useful start for some of you pursuing this goal, though you should seek legal advice particular to your own situation before doing (or not doing) something related to any of the topics touched on above.

Just as a nation’s greatness is measured by how it treats its weakest members*, a profession’s greatness is measured by how it treats its new graduates and other vulnerable members. As a profession, we’re good at helping our clients. But we need to help each other, too. A good start is to ensure we meet – and preferably exceed – our employment law responsibilities.

*Quotation: Mahatma Gandhi.

Image: https://tinyurl.com/hfafrtz

Speech pathologists: how to build ethical, profitable, high quality private practices that outlast us